Blackstone buys International Gemological Institute at $570 mn valuation

The world’s largest alternative asset manager Blackstone on Sunday acquired jewellery certification firm International Gemological Institute (IGI) in a $570-million (over Rs 4,700 crore) deal.

Shanghai Yuyuan Tourist Mart (Group), a subsidiary of China-based conglomerate Fosun, and Roland Lorie, who belongs to the founding family, sold their 80 and 20 per cent stake, respectively, in the deal that had $35-million cash outgo.

Founded in 1975 in Antwerp, IGI is a global leader in independent certification of diamonds, gemstones, and jewellery, with a global footprint of 29 laboratories.
 

It has 18 gemology labs in India and depends on its operations here for a majority of its revenue and profits. Diamonds manufactured in India, the largest diamond polisher in the world, are typically sold in the US retail market.
 

This acquisition ties in with the strategy of the New York-headquartered Blackstone to enter more consumer-facing businesses. Blackstone has identified technology, consumer retail, and health care as investment destinations in India.
 

Mukesh Mehta, senior managing director at Blackstone Private Equity Group, said that “IGI has spearheaded the certification of natural diamonds, lab-grown diamonds, and coloured stones,” and that Blackstone will bring its “operational expertise, capabilities in technology, and global track record in building successful businesses to help the company expand its global footprint”.
 

“We are pleased to entrust Blackstone to take IGI on to its next stage of development,” Lorie, who is also the chief executive of the company, said, adding the aim is to grow the business “exponentially” from here.
 

 The global retail market of lab-grown diamonds is currently estimated at $7 billion and has grown at 15 per cent compound annual growth rate between 2019 and 2022, according to industry estimates. On the other hand, the global retail sales of natural diamond jewellery stood at $80 billion, growing at 3 per cent.
 

“It has been our pleasure to work with Mr. Roland Lorie and the management team driving IGI’s rapid growth in the past four years,” said Kevin Shikun, co-chief investment officer of Fosun, and co-chairman, Yuyuan. “Today, IGI’s business is more diversified and solid with a more globalised landscape. We believe IGI is about to embark on a new journey of rapid growth with Blackstone’s global synergy,” he added.